What a week. Last Thursday, the House released its vision for tax reform, launching a flurry of analysis by the tax geeks, hand-wringing by the middle class, and defensive measures by the GOP.

Then, late last night, just as the House Ways and Means Committee culminated a four-day mark-up of HR 1 by voting to advance the bill along party lines, the Senate decided it was time to get in the mix by releasing its plan to revise the tax law.

There’s a lot to take in, clearly. It was hard enough to fully grasp how current law compared to the House bill, but now we’ve got to layer on the Senate proposal, which varies from both current policy and the House proposal in several significant ways.

What follows is a summary of the opening week of “tax reform season,’ with an item-by-item comparison of current law, the updated House proposal, and the newly-published Senate bill.

Aspen, Colorado is known throughout the world for its idyllic landscape, world-class skiing, and hourly Mariah Carey sightings. It’s an amazing place to live, assuming, of course, you can afford it.

You see, the ol’ 81611 is one of the more expensive zip codes in America; if you want a piece of dirt within the city limits, it’s going to cost you well over seven digits. This is precisely why people like me are stuck living 15 miles away in a middle-class haven, content to rub elbows with the stars only as a visitor, never a neighbor.

Doing business in Aspen is no cheaper; rents are painfully high for commercial space. And when that’s the case, the best business to be in is usually that of a landlord. But being a landlord is hard work; you must constantly deal with late hours and annoying tenants.

But what if someone told you that as a landlord, you could pocket a lot more of your hard-earned money, if you’re only willing to make one concession: work less.

Well, that appears to be exactly what HR 1, the tax proposal released by House Republicans last week, is asking you to do.

Hey, you. Yes, you. Big corporation that just HAD to have a huge tax cut. Well, you got your way: of the $1.5 trillion in tax breaks in the House bill, nearly $1 trillion of it winds up right in your already-plump pockets.

But you might want to wipe that smug look off your face. Sure, the corporate rate will plummet from 35% to 20% if the bill becomes law, but the House’s proposal wasn’t ALL good news for big business. Like any tax bill, there was some give and take.
Let’s take a look:

Take: Borrowing Got More Expensive

Businesses borrow money; probably more than they should. What makes it palatable, however, is that a deduction is currently allowed for the interest expense, reducing the after-tax cost of borrowing.

The House bill would end that gravy train, however, by disallowing a businesses’ net interest expense (interest expense in excess of income) in excess of 30% of the company’s EBITDA. That’s right, you heard me…EBITDA is now factoring into tax calculations. Please give me more of that sweet, sweet simplicity.

Earlier today, the House of Representatives released its vision of tax reform, and there’s a lot to digest. Over 420 pages, in fact. Luckily, there has been no shortage of quality coverage of the bill around the interwebs, detailing the changes to tax rates and personal exemptions and the like.

But with 420 pages, some things are sure to slip through the cracks, and it is to these less publicized items that this column intends to draw attention.

Of course, there are both unexpected tax breaks and increases hidden within the bowls of the bill, but lest you forget, I’m generally a miserable person who prefers to dwell on the negative. As a result, let’s take a look at six tax breaks that you very likely didn’t realize you will lose if today’s bill becomes law.

#1: Divorce just got even more expensive

Under current law, alimony payments are deductible by the payor, and considered taxable income to the payee. And because you people are simply incapable of remaining faithful, there is a lot of alimony paid each year, about $10 billion to be exact.

Today was the day. At long last, the first domino that may eventually leave to a thorough overhaul of our tax law was toppled by the House of Representatives with the release of the Tax Cuts and Jobs Act.

For members of the tax-paying public, it can be tough to make sense of it all. When searching for someone to explain the potential changes in terms anyone can understand, options are scarce. Of course, you could simply wait around for the White House’s afternoon presser and listen to Sarah Huckabee Sanders correlate the corporate tax cuts with the exploits of “a man from Nantucket.”

Or, you could just keep reading here. Because what follows is a 30,000 foot view of the new bill, and I say that not because it’s a brief and top-level summary, but rather because I’m actually typing on a plane from Aspen to NYC.

On Monday, White House Press Secretary Sarah Huckabee Sanders took a break from her daily deflections of allegations of sexual assault and collusion against her employer to kindly teach the nation a lesson on how the tax law works.

You see, President Trump has long promised once-in-a-generation tax reform, hoping to use the GOP’s majority in the Senate to pass THE BIGGEST TAX CUTS IN HISTORY while adding much-needed simplicity to our morass of a tax law. And that promise begins its path to reality on Wednesday, when the House is slated to release the first draft of proposed legislation.

If you’re curious about the changes expected to be contained within that proposed legislation, feel free to read here. But the nature of any proposed tax cuts was not really what Sanders’ impromptu dissertation was about; rather, she took it upon herself to address what many Americans are preemptively speculating as they anticipate the release of the GOP plan: will this be a big tax cut for the rich, at the expense of the rest?

What followed was nearly four minutes that no one who was present for the performance will ever get back, and the point was clear: if the richest taxpayers get a bigger tax cut than everyone else, that’s perfectly OK, because:

1.The rich pay more tax to begin with, and
2.While the rich may get the biggest cut in terms of dollars saved, the remaining 99% of taxpayers would enjoy a bigger percentage reduction in their tax bill.

The indictment is the first handed down pursuant to an investigation conducted by Special Counsel Robert Mueller into Russia’s meddling in the 2016 Presidential election. Also charged was Rick Gates, Manafort’s former business associate.

In order to gain a full understanding of the charges — particularly the tax violations alleged in numbers 2 and 3 — we must first recap the activities the government maintains Manafort engaged in from 2006 through 2014.

The Alleged Scheme

Beginning in 2006, Manafort worked as an unregistered agent in the Ukraine, acting as a political consultant, lobbyist and public relations professional for factions within the Ukraine government. Specifically, the claim alleges, Manafort worked to advance the political futures of members of the Ukraine’s pro-Russia Party of Regions.

The items in this blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. A select group of Tax Professionals of WithumSmith+Brown write Double Taxation, and any opinions expressed or implied are not necessarily shared by anyone else at WithumSmith+Brown.

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